In his exclusive interview with Bloomberg Businessweek—on newsstands now—Apple Chief Executive Tim Cook announced that starting next year, Apple will be bringing some of the production of its Mac computers back to the U.S. “We’re really proud of it,” he said. “We could have quickly maybe done just assembly, but it’s broader, because we wanted to do something more substantial. So we’ll literally invest over $100 million.”
The sum of $100 million is slightly more than 1⁄100 of the company’s profits last quarter, so the announcement was dismissed in some quarters as a publicity ploy. It’s very possible that’s all it is. On the other hand, the relatively small size of the initial investment doesn’t mean the company isn’t taking the effort seriously. It’s possible that it’s an experiment, a small pilot program exploring whether the company can profitably and reliably make its products in the U.S. And if any tech company could make it work, it’s .
Labor costs make up a fairly small sliver of the cost of an Apple product. Still, according to Blake Johnson, a manufacturing and supply chain expert at Stanford University, Apple is not simply going to replace $2.50-an-hour labor in Shenzhen with $15-an-hour American workers. Instead, the plan is most likely to shift to more automated manufacturing, an approach that Johnson points out makes particular sense for Apple. Whereas dominated the PC market a decade ago by offering customized computers, Apple grew into the largest company in the world by selling a limited suite of products: iPhones, iPhones, iPods, and Macs. “Apple’s product line is highly standardized, with a very small number of products and very few configurations, and that makes it much easier to do automation,” Johnson says. There’s some precedent for this in the company’s DNA: NeXT, the company Steve Jobs founded after being fired as Apple’s CEO in 1985, built its workstation computers in a robo-factory in Fremont, Calif.